It's the most challenging time of the year to stick to a budget

Monday

Dec 23, 2013 at 12:01 AM

John Hielscher

Having a hard time stocking to your holiday budget? You're not alone.

While three quarters of Florida parents with young children say they set a spending budget for Christmas, just over 60 percent admit they spent more than they planned, according to a new survey by BMO Harris Bank.

And more than a fifth of them plan to take on debt to pay for their holiday giving.

BMO Harris' inaugural spending report, which surveyed parents with children under 10 years old, found that 34 percent of Florida parents with young families have a fixed budget for the holidays, with 42 percent saying they have a somewhat flexible budget.

But 68 percent acknowledge making impulse purchases during the season, and 45 percent of parents say they will regret how much they spent come January. The national figure was 37 percent.

"It is encouraging to see that such a large percentage of parents have a budget in place for their holiday spending," said Dave Maraman, BMO's Sarasota-based regional president for Florida.

"This time of year can be stressful, particularly in terms of the added expenses. Sticking to your budget may be the hardest part, but if you do take on debt to pay for gifts, it is important to have a plan to be able to pay it down quickly."

More than half of the Florida parents say this is the only time of year they spend outside of their budgets.

And 54 percent say they go into debt because of the pressure to spend and celebrate, far more than the 39 percent nationwide who who are trying to "keep up with the Joneses."

Meanwhile, nearly four in 10 Americans say they plan to spend less this holiday season than they did last year, Bankrate.com reported in its latest survey.

Only 14 percent expected to spend more this year, and 47 percent plan to spend about the same amount.

Households with incomes under $50,000 are the most likely to say they plan to spend less this year.

"Many Americans continue to struggle with little or no savings and stagnant wages, forcing them to rein in their spending this holiday season," said Greg McBride, Bankrate's senior financial analyst.

"Overall, Americans are feeling more financially secure after the government shutdown and debt ceiling saga were resolved, but many are still clutching their pocketbooks closely," McBride said.

Americans' feelings of financial security are now at their highest level since August.

Overall, 25 percent feel better about their finances than they did last year, and 18 percent feel worse.

Feelings of job security turned positive in December for the first time since September, completely unwinding the negative sentiment of the past two months, Bankrate noted.

Net worth continues to be a strong area of financial security: Those reporting higher net worth than one year ago outnumber those reporting lower net worth by three to two.

But savings continues to elicit negative feelings about financial security, which it has every month for the past three years.

Death-benefit settlement

The Florida Office of Insurance Regulation, along with regulators from other states, have reached another settlement with a major life insurer over the payment of death benefits.

Lincoln National Life Insurance Co., Lincoln Life and Annuity Co. of New York and First Penn Pacific Life Insurance Co. will pay $12.6 million and agree to reform the way they use the Social Security Administration's Death Master File to cease making annuity payments but not to search for beneficiaries of life insurance policies who may be due benefits.

Lincoln is one of the top five life insurers in the country, representing about 4.4 percent of the overall life and annuity market.

The companies have agreed to implement business reforms correcting the practice. Florida will receive more than $1 million of the settlement, which involves multiple states.

"With the signing of this agreement, more than 55 percent of the life and annuity insurance companies representing the market have now pledged to implement business reforms to appropriately identify deserving beneficiaries and return monies owed," state Insurance Commissioner Kevin McCarty said.

Contact John Hielscher at 361-4875, fax to 361-4880 or email john.hielscher@heraldtribune.com.